The initiative, which was being discussed informally by the heads of top media agency units apparently met resistance from the CEOs and CFOs of their parent companies, especially the Big 4 - Interpublic, Omnicom, Publicis and WPP Group - who were said to fair the public accountability of reporting media billings data in the aftermath of the Sarbanes Oxley Act.
The law, which requires corporate managers to certify financial data they release as being accurate, has caused the major publicly traded agencies to stop releasing billings data, which many believe may not have lived up to the truth and accuracy test of the new law. The change has created a void of information about agency billings clout and rankings and a group of top media executives led by Starcom MediaVest Group chief Jack Klues had been in talks to develop more accurate and accountable system.
Klues declined to comment on the status of the project, but executives familiar with the initiative told MDN there was a "handshake agreement" among the Big 4 to put a stop to it and maybe not necessarily for fear of government scrutiny.
The real concern, they say, was that an objective effort to produce credible data would have grossly changed the public billings rankings of many top media units. "The truth is there's a certain amount of fudge in all of the billings figures, because of the way people capitalize service and fee-based business, but the reality is that some agencies have fudged more than others and that would have been embarrassing when it all came out," said one of the executives. According to this executives own estimates, a shop like Interpublic's Initiative Media, which claims to be the third largest in U.S. media billings, would rank ninth among the largest media agencies, just behind Grey's MediaCom unit.
The lack of self-reported data is expected to fuel attempts by independent publishers and researchers to develop new billings benchmarks, but the changes are likely to create some short-term confusion, as the new estimates are reconciled with historical trends.
Interestingly, the only agency not to fall under the Sarbanes Oxley act because it does not trade any shares on U.S. exchanges, the Aegis Group, owner of Carat, reports its billings publicly each year as part of its annual report. None of the other publicly traded agency holding companies break out the discrete billings or revenues of the media operations.
"We would have welcomed it," says Carat CEO David Verklin, referring to a third-party system for reporting media billings. "We've been reporting and declaring our billings in our annual reports for ten years."